Derivative Liabilities

3 Months Ended

Mar. 31, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

5. Derivative Liabilities

As discussed in Note 4 under Convertible Notes, the Company issued convertible notes payable that provide for the issuance of convertible notes with variable conversion provisions. The number of shares of common stock to be issued is based on the future price of the Company’s common stock. The number of shares of common stock issuable upon conversion of the note is indeterminate. Pursuant to ASC 815-15 Embedded Derivatives, the fair values of the variable conversion shares to be issued were recorded as derivative liabilities on the issuance date. The fair values of the Company’s derivative liabilities were estimated at the issuance date and are revalued at each subsequent reporting date, using a binomial option pricing model. The loss (gain) in fair value of derivatives was for $15,825 and ($9,643) on the Company’s statement of operations as of March 31, 2016 and 2015, respectively.

The following is a summary of changes in the fair market value of the derivative liability during the three months ended March 31, 2016:


		Derivative Liability Convertible Debts Total
Balance, December 31, 2015	$	$132,287
Increase in derivative value due to issuances of convertible promissory notes		-
Decrease in derivative value due to issuances of common stocks for conversions		(38,695)
Change in fair market value of derivative liabilities due to the mark to market adjustment		15,825
Balance, March 31, 2016	$	109,417

- Definition

The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts.

+ References

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+ Details

DMH INTERNATIONAL, INC. 10-Q